Book · 2019
How Perverse Incentives Caused the Financial Crisis
What caused the Financial Crisis of 2008? Most explanations blame either government regulation or government deregulation. Either government forced private-sector banks and financial institutions to extend credit to risky borrowers, or the removal of government oversight allowed greed to run amok.
In Gambling with Other People's Money, Russ Roberts argues that a long series of government bailouts distorted the incentives of lenders, borrowers, and Wall Street, encouraging the risk-taking that led to the crisis.
“If you want a single source to understand economics, go to Russ Roberts. I learned more from him about the subject and the reasoning than from any other person, dead or living.”
Nassim Nicholas Taleb, scholar and former trader